Eppeltone Engineers Ltd Management Discussions

For the Financial Year ended March 31, 2026

1. Industry Structure and Developments

The Indian power sector continued to witness significant transformation during FY 2025-26, driven by the Government of Indias continued emphasis on power sector reforms, digitalisation of electricity distribution infrastructure, expansion of renewable energy and implementation of smart grid technologies. Smart metering remained one of the key pillars under the Revamped Distribution Sector Scheme (RDSS), aimed at reducing Aggregate Technical & Commercial (AT&C) losses, improving billing efficiency and strengthening operational performance of Distribution Companies (DISCOMs). The nationwide transition from conventional metering systems to Advanced Metering Infrastructure (AMI) continued to create substantial opportunities for manufacturers of smart meters and associated communication technologies.

The Governments focus on "Digital India", energy efficiency, renewable energy integration and modernisation of distribution networks is expected to provide sustained long-term growth opportunities to the metering industry. Increasing investments by Central and State Utilities, public sector undertakings and private EPC contractors are expected to drive demand for technologically advanced metering solutions.

2. Business Overview

Eppeltone Engineers Limited is engaged in the design, development and manufacturing of electronic energy meters, smart electricity meters, multifunction meters, LTCT meters, communication modules and allied power conditioning products. Over the years, the Company has established itself as a trusted supplier to State Electricity Boards, DISCOMs, Central Public Sector Undertakings and reputed private turnkey contractors across India.

During FY 2025-26, the Company continued to strengthen its position in the smart metering segment while expanding its product portfolio to cater to evolving customer requirements. The Company also continued to focus on research and development, product innovation and quality enhancement to remain competitive in the rapidly evolving metering industry.

The successful listing of the Companys equity shares on the NSE EMERGE Platform during the previous financial year has further strengthened its corporate governance framework, enhanced visibility among investors and provided access to capital markets for future growth initiatives.

3. Opportunities and Threats

Opportunities

Accelerated implementation of RDSS and nationwide smart metering projects. Growing investments in smart grid infrastructure.

Increasing demand for Advanced Metering Infrastructure (AMI) solutions.

Expansion of renewable energy requiring advanced metering systems.

Government initiatives promoting "Make in India" and domestic manufacturing. Growing demand for integrated energy management solutions.

Opportunities in water and gas metering solutions. Increasing export potential for Indian metering products.

Threats

Delay in execution of government projects and tendering processes.

Intense competition from domestic and multinational manufacturers.

Fluctuation in prices of electronic components and raw materials. Supply chain disruptions and semiconductor availability.

Technological obsolescence requiring continuous investment in innovation. Working capital pressures arising from extended credit cycles of utilities.

Changes in regulatory standards and certification requirements.

4. Segment-wise or Product-wise Performance

The Company primarily operates in one reportable business segment, namely manufacturing and supply of electronic energy metering solutions and allied products.

The Companys product portfolio includes:

Smart Electricity Meters Static Energy Meters LTCT Meters Multifunction Meters Communication Modules Gateways Solar Metering Solutions Water Meters Gas Metering Solutions Metering Accessories Power Conditioning Products

The Company continued to strengthen customer relationships through product quality, timely deliveries, technological innovation and enhanced service capabilities.

5. Outlook

The outlook for the Company remains positive.

The Governments continued emphasis on smart metering under RDSS, digital transformation of power distribution infrastructure and increasing investments by utilities are expected to generate sustained demand over the medium to long term.

The Company intends to leverage its manufacturing capabilities, strong customer relationships, in-house research & development, quality certifications and experienced management team to enhance its market presence. Continuous investment in technology, product development, automation and operational excellence will remain key focus areas.

The Company also intends to explore opportunities in adjacent metering technologies including water and gas metering as well as integrated energy management solutions.

6. Risks and Concerns

The Company operates in an industry that is influenced by government policies, utility spending patterns and technology evolution.

The major business risks include:

Dependence on government and utility procurement cycles. Delay in execution of customer orders.

Volatility in raw material prices.

Foreign exchange fluctuations on imported components. Customer concentration risk.

Technological changes.

Regulatory compliance requirements.

Cybersecurity risks associated with connected smart metering infrastructure.

Working capital management due to extended receivable cycles.

The Company has established appropriate internal systems for monitoring these risks and periodically reviews mitigation measures through its management and Board of Directors.

7. Internal Control Systems and Their Adequacy

The Company has an adequate internal control framework commensurate with the size, scale and complexity of its operations. The internal control system is designed to ensure:

Protection of assets.

Accuracy and reliability of financial reporting. Compliance with applicable laws and regulations. Operational efficiency.

Effective risk management.

Prevention and detection of frauds and irregularities.

The Company has implemented appropriate Standard Operating Procedures (SOPs), authority matrices and internal financial controls. Internal audits are conducted periodically and significant observations are reviewed by the Audit Committee and the Board to ensure timely corrective actions.

8. Financial Performance

During FY 2025-26, the Company continued to focus on sustainable growth through operational excellence, improved productivity and disciplined cost management.

The management remained focused on:

Improving operational efficiencies. Capacity utilisation.

Product mix optimisation. Working capital management. Customer diversification.

Technology-driven manufacturing.

Strengthening profitability.

The detailed financial performance has been discussed in the Directors Report together with the audited financial statements.

9. Human Resources

Employees remain one of the Companys most valuable assets.

The Company believes in attracting, developing and retaining talented professionals by providing a safe, inclusive and performance-oriented work environment.

Continuous learning programmes, technical training, leadership development and employee engagement initiatives were undertaken during the year to enhance productivity and skill development.

Industrial relations remained cordial throughout the financial year.

10. Quality, Technology and Innovation

Innovation and quality continue to remain integral to the Companys growth strategy. The Company continues to invest in:

Product research and development. Smart metering technologies.

Process automation. Quality assurance systems. Product testing infrastructure. Digital manufacturing initiatives.

The Companys focus on continuous technological advancement enables it to meet evolving customer requirements and maintain compliance with applicable industry standards.

11. Sustainability and ESG Initiatives

The Company remains committed towards sustainable manufacturing practices and responsible business operations. Key focus areas include: Energy-efficient manufacturing processes.

Waste reduction initiatives.

Compliance with environmental regulations. Responsible sourcing practices.

Employee health and safety. Ethical business conduct. Good corporate governance.

The Company shall continue to integrate sustainability considerations into its long-term business strategy.

12. Cautionary Statement

Statements made in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may constitute "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied depending upon economic conditions, government policies, regulatory developments, demand and supply conditions, technological changes, availability and prices of raw materials, competitive environment and other incidental factors beyond the control of the Company.

The Company undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.